Corning Inc. expects rising demand for products

It's been a turbulent year for Corning Inc.

orning Inc.'s CEO and Chairman Wendell Weeks described 2008 as a year with a "split personality," saying that the company had been on track for a year of record-breaking performance through the first half, but business momentum began to decline in the third quarter.

"The economic slowdown has affected most of Corning's businesses," he said Thursday at the company´s annual shareholders meeting at the Corning Museum of Glass.

Early in 2008, he said, company officials were aware that the economy was struggling, but admitted that they "underestimated the speed and severity of the (economic) downturn."

Weeks reported that the first quarter of 2009 remained weak, with company sales down 9 percent sequentially and down 39 percent year over year. However, Corning Inc.'s performance was better than expected, he added, since the company still was profitable.

The Fortune 500 company's primary focus is on "protecting the financial health of the company by preserving and conserving cash and by investing in the future to create new revenue streams," Weeks said.

He addressed the company's recent layoffs and the closing of plants, calling them "painful actions," and described Corning Inc.'s "rings of defense" model for cost-cutting strategies. Stating his confidence in the company's long-term outlook, he mentioned trends that could drive demand for Corning Inc.'s products.

"Consumers will continue to replace their CRT televisions with LCD TVs," he said. "The appetite for higher bandwidth will continue to create demand for our fiber-to-the-home products. And tighter environmental regulations are going into effect around the globe that will drive adoption of Corning's substrates and filters for emissions control."

Weeks discussed the implementation of successful recent products such as the ClearCurve products, the Epic drug screening technology and the Gorilla glass, which has now been designed into 20 different electronic devices. He also described three new initiatives: synthetic green lasers that make it possible to project large, high-resolution images from portable devices such as cell phones; glass reactors that increase the efficiency and quality of chemical processing; and photovoltaics technology that leverages Corning´s flat glass for solar energy.

Describing even more new products and initiatives, Clark Kinlin, president and CEO of Corning Cable Systems gave an overview of Corning´s Telecommunications segment.

"Only optical communications systems have the capability to keep pace with the world´s insatiable demand for bandwidth," Kinlin said. Citing the commonality of households having high definition televisions, DVRs, computers and video games, he explained that consumer demand will continue to increase, predicting that the demand for bandwidth will grow to 100 megabits by 2012.

"We will improve our market position by solving our customers' toughest problems: expanding their network capabilities and reducing their costs," Kinlin said.